Trending Globally: Aluminum Megatrends

Amanda Gilmore


 A trend: the general direction in which something is developing or changing.

Fashion trends, entertainment trends – we see them, we follow them (or not), and we sometimes regret them. There are those who say the world is experiencing a trend toward warmer temperatures; an upward trend in the stock market gets investors excited.

Trends – they’re all around.

In the transportation industry, a trend toward more fuel-efficient vehicles has existed for decades. But that trend has grown larger in recent years, to the point where some, like Craig Bouchard, call it a megatrend. Megatrend: Large-scale change; a major movement.

“Much lighter cars get a lot more mileage. Much lighter cars with higher mileage put less carbon in the air. That is a megatrend, in the U.S. and other countries as well,” Bouchard, the chairman and CEO of Braidy Industries, said during a recent speech at a Portsmouth (Ohio) Chamber of Commerce dinner. “We want to be in the middle of providing the aluminum for that megatrend.”

So, you could say that Braidy Industries was following a trend last year when it decided to build a $1.4 billion state-of-the art aluminum rolling mill in northeastern Kentucky. But that would be simplifying things greatly. The company conducted mounds of research, and examined 23 possible locations for its new mill before selecting the Ashland region.

One very important aspect of its research is what’s known as the Corporate Average Fuel Economy (CAFE) standards. The standards date back to the oil crisis of the early 1970s, which spurred Congress to pass laws requiring higher fuel economy numbers for cars and light trucks. This helped MPGs (miles per gallon) rise steadily for a while, but they stalled out (at 27.5 for passenger cars) in the early 1990s and haven’t budged much since.

Under the Obama administration, the CAFE standards were tightened again, with a goal of pushing fuel economy to 54.5 MPG by 2025. But President Trump, who wants automakers to expand production in the U.S. and hire more workers, has promised in exchange to cut regulations and taxes.

“As it stands right now, none of them (US. automakers) are going to make the standards by 2025, and they know that,” said Blaine Holt, chief operating officer and general strategist for Braidy Industries.

Whatever happens to fuel economy standards, and the time allowed to reach them, one thing is certain: vehicles – be they powered by gasoline, electricity or hydrogen fuel cells – will continue to get lighter. “Vehicles already have good engines. So, to attain the higher MPG, automakers have to look at the body and get away from steel,” Holt said. “The only comparable dense metal is aluminum.”

Already, nearly two years before the first aluminum is expected to roll out of the mill, Braidy has agreements to supply five of the top 10 auto producers with its finished product. “Our plant is already presold to almost 200 percent,” Holt said.

Independent research shows that by 2025, there will be a 500,000-ton shortage of aluminum in this country, and manufacturers are keenly concerned.

“There may be some sort of legislative relief on the CAFE standards, but they aren’t going away. Car companies are committed to improving fuel economy,” Holt said. “The train has already left the station, and that train is made of aluminum.”

The Braidy mill has been designed in two phases. The first will produce 300,000 tons of aluminum annually; the second 200,000. Braidy’s customers are actually driving the plant design, which means, “right out of the gate, we will be optimized,” Holt said.

The plant is expected to employee 550 workers with starting annual pay of between $50,000 and $70,000. But those jobs, Holt said, are likely just the beginning. “All the aluminum and materials and science and technology that goes into building this plant is where we want to focus, where the community needs to focus. You don’t hang your hat on just one industry.”

Braidy will be the catalyst for material providers and satellite companies that will locate in the area surrounding the EastPark plant, Holt, Bouchard and many others predict.

“Material science in Eastern Kentucky is where our opportunities are,” said Holt. “A diversified economy of material science and high technology – that is our region’s future.”